ST. PAUL, Minn. ( TheStreet) -- The EnteroMedics ( ETRM) implantable weight-loss device known as VBLOC is a pulsing placebo. The company's hopes that VBLOC would be a fat zapper were dashed Thursday night with the release of top-line results from the phase III study known as RECHARGE. Patients implanted with an active VBLOC device lost just 8.5% more "excess weight" than those implanted with a dummy (non-working) device. The result missed statistical significance by a wide margin, with a p value of 0.70. EnteroMedics tried to spin the disastrous results from the RECHARGE trial as a near miss and said it would still seek FDA approval for the VBLOC device.
A previous phase III study of VBLOC, known as EMPOWER, also failed. Investors weren't fooled, sending EnteroMedics shares down 53% to $1.35 in Thursday's after-hours trading session. VBLOC is a surgically implanted device that uses electrical pulses to block the primary nerve regulating digestion. Unlike pacemakers, patients power the EnteroMedics' VBLOC device on and off with a control belt worn around the waist. When VBLOC is on, patients are supposed to feel less hungry, eat less and lose weight. Except patients didn't lose weight. Obese patients implanted with a fully operational VBLOC device achieved a 24.4% average "EWL" compared to 15.9% for patients implanted with a sham device. "EWL" stands for excess weight loss and is calculated as a percentage equal to total weight loss in the trial (the numerator) divided by the difference in baseline weight and "ideal weight" using a BMI of 25 (the denominator.) In order for the study to be successful, VBLOC was required to hit a 10% statistical superiority margin over the sham device. From a non-statistical perspective, that meant the VBLOC EWL needed to be approximately 20% higher than the EWL of the sham device. Clearly, the 8.5% numerical difference came nowhere close to a 20%. VBLOC also missed another efficacy measure of weight loss that served as the study's co-primary endpoint. EnteroMedics didn't provide any details on the mean weight loss or body mass index of the patients enrolled in the study, making it impossible to calculate the actual weight loss by VBLOC patients.